Spontaneous Fractures -- August 2020

 It’s a little daunting starting a new dairy season when you’re coming off the back of the best season the farm has ever had; record production has the effect of setting high expectations of yourself and your staff, and the desire to beat the previous year’s results is foremost in your mind.

Mid Canterbury has had the perfect start to the 2020 season; pasture covers lifted in June thanks  to mild temperatures and good rainfall while all the cows were off farm, and the continuing mild and dry weather since the cows came home has made this one of the easiest calvings I can remember.

While I’ve been making the most of the fine and settled weather I’ve also been waiting for something to go wrong, after all nothing this good can last forever.  I’ve been maximising the benefits of the great conditions while simultaneously bracing myself for an adverse event along the lines of the snowfall of 2006, the one that left this farm without power for twelve days and others in the dark for much longer.

Sure enough things did go wrong. Awfully, spectacularly and terribly wrong in a way I never imagined they could.

Around the 20th of June each year I walk the heifers back from grazing at my neighbour’s place so they can calve conveniently next to the cow shed. This year my neighbour called to say there were three heifers lame on their front feet and, being the conscientious man he is, he’d scoured their paddock for anything that might have caused them physical harm but found nothing.

Those three animals weren’t going to make the trip home unassisted, so we left them behind and made the short journey back to the farm with the rest. By the time we’d finished the two kilometre walk I had two more heifers limping on their front feet.

I’m no stranger to lame cows but I’d never seen anything like this so, after my own inspection revealed nothing obvious, I administered pain relief to all five animals and called the vet.

Shannon from VetLife Ashburton arrived in short order and it was clear from the look on her face as she got out of her truck that she knew what was up, and it wasn’t good. A quick examination of the closest animal confirmed her fears, spontaneous humeral fractures; all five heifers had broken shoulders.

I was horrified and asked if there was any chance they could recover. Shannon had heard this before and was quick to point out I’d been fooled by the benign nature of the term fracture, in reality the bones had exploded in spectacular fashion and the only course of action was to put the heifers down.

There doesn’t need to be any great physical exertion on the animal’s part for the bone to break, they can be walking normally down the track and suddenly pull up lame. The fracturing truly is spontaneous.

The exact cause of the fractures isn’t fully understood; though copper deficiency as a calf is known to be a factor preventing animals from reaching peak bone mass. Fracture doesn’t convey the full horror of what happens in these instances, and Shannon took a bone to display in the clinic to help raise awareness of the severity of the injury.

It’s an issue unique to New Zealand, first reported here in 2008 and affecting some 4% of dairy farms, approximately 5000 heifers are thought to be lost to the condition each year. Affected farms all over the country have reported losses ranging from 1% to 25% of their replacement heifers, though I have heard anecdotes about a farmer who suffered losses of 50%.

I was bitterly disappointed when a liver biopsy confirmed copper deficiency as the likely cause, our copper supplementation regime hasn’t changed in years and we’ve never had any issues before.

We’ve lost 10% of our heifers to spontaneous humeral fractures this year, a fact that I find very upsetting and quite embarrassing, not to mention the distress of the afflicted animals and the need to act quickly to end their suffering.

Until now I’ve kept this situation to myself, sharing it only with people who absolutely have to know, but seeing Shannon’s frustration at getting farmers to understand the severity of the problem and the simplicity of the prevention convinced me to put my feelings aside and talk about it here.

Very few people check the trace element status of their young stock, but this is one of those situations where you definitely don’t want to find out about it the hard way.

Desperate Lobbying For The Status Quo -- July 2020

You could be forgiven for thinking the Dairy Industry Restructuring Act (DIRA) reforms were a done deal; a cross-party panel of MPs had unanimously recommended a raft of sweeping changes that addressed issues that have been plaguing the industry for years, and they did so with a refreshing display of clarity, common sense and unity.

After eight years with no changes, a period during which independent processors have been given a leg up at the expense of New Zealand dairy farmers, the Select Committee decided that DIRA had achieved its goal of fostering competition in the dairy industry and it was time for all processors to stand on their own merits.

Having failed to convince the Select Committee to maintain the status quo with their formal submissions, the independent processors are now publicly lobbying to keep the uneven playing field tilted in their favour. They have arranged a last minute meeting with the Minister of Agriculture in an attempt to stop the legislation being passed before the election so they can have another go at arguing for the retention of DIRA’s open entry provisions.

The removal of open entry would mean farmers that leave the co-operative to supply other processors can no longer automatically return at a later date.

Fonterra’s competitors have fought hard for many years to retain open entry, the rule that forces Fonterra to accept milk from anyone who wants to supply them, because it makes it far easier for them to poach supply from the Co-operative. This provision has been responsible for a massive spike in dairy conversions as it forces Fonterra to collect all the new milk whether they want to or not.

I’m disappointed but not surprised by this cynical politicking; Miraka admitted to the Select Committee that they had no desire to attract any more suppliers, so I can only conclude their passion for retaining the open entry provision is to weaken Fonterra.

As all independent processors benchmark their milk price to farmers on Fonterra’s payout, a weaker Fonterra means higher margins for themselves.

Open Country Dairy were so determined to force Fonterra’s payment to farmers down, they recently took the Commerce Commission to the High Court over the way Fonterra’s milk price is calculated. The High Court ruled that Fonterra, the only processor with transparent milk price calculations, were paying farmers correctly and fulfilling their obligation to give their farmer shareholders the highest possible return for their milk.

In a scenario where open entry is removed as the Select Committee recommended, independent processors would be faced with having to convince potential new suppliers of the economic benefits of switching processors. Part of this could entail showing how they arrive at their milk price rather than just promising to be in the vicinity of Fonterra’s payout, and if there’s one thing these foreign backed processors don’t want it’s transparency.

One thing became abundantly clear as I watched the independent processors make their submissions to the Select Committee, their entire motivation for maintaining the status quo was to hamstring Fonterra in an attempt to boost their own margins.

Having failed to make that argument at an open hearing they now want to try it behind closed doors, and I can only hope the Minister sees that it hasn’t improved with age.

Freshwater; Style over Substance -- June 2020

Much has been written about the Ministry for the Environment’s (MfE) newly released National Policy Statement (NPS) on Freshwater, some groups are cautiously optimistic while others are outraged. Generally when nobody is happy with a decision Government has made it’s an indication they’ve got things pretty much right; I’m not so sure that’s the case this time.

From a farmer’s perspective the NPS could have been much worse; we were faced with the prospect of tearing down thousands of kilometres of fences and putting them back up a couple of metres further away from waterways, and worse, the prospect of a “one size fits all” nitrogen limit for the entire country in spite of its potentially devastating economic consequences for diminishing environmental outcomes.

The majority of freshwater ecologists in the MfE science and technology action group (STAG) were arguing for this blanket nitrogen limit, 1mg of dissolved inorganic nitrogen per litre of water, or 1% DIN. The remainder of the nineteen-strong STAG, the Cautious Five, wanted to use another method  entirely to measure a river’s health, the macroinvertebrate community index (MCI); quite literally counting the creatures in the water to determine how healthy it is.

In the end the Government ignored both of these options and decided to stick with the current measure, nitrogen toxicity, something the majority of the STAG warned against as they see it as a poor basis for nutrient limits and it’s a measure no other country in the world uses.

While the STAG were busy trying to define bottom lines, farming industry bodies were proposing an entirely different system based on nitrogen surpluses; they wanted Regional Councils to set nitrogen leaching limits on a catchment by catchment basis and then farmers would report all their nitrogen inputs and outputs, something that is facilitated by the nutrient budgeting required by the now mandatory Farm Environment Plans. Farmers would then need to reduce their nitrogen surplus until it fell within their catchment’s limits.

This wasn’t implemented either and instead the Government set a limit on the use of synthetic nitrogen on pastoral land. This came out of left field, an option that was never discussed throughout the entire consultation period, and the 190kg/ha/year limit affects almost nobody except dairy farmers in Canterbury where nitrogen use averages around 220kg/ha/year.

Nobody can understand this synthetic nitrogen metric; there’s no difference between synthetic nitrogen and the stuff you find in chicken manure or bought in feed, large swathes of farmland are exempt as they are arable instead of pastoral and fertiliser itself isn’t usually responsible for the nitrogen that leaches in waterways; the culprit is mainly urine patches where highly soluble nitrogen is concentrated in one spot.

It seems to me that the reason for the strange decisions around nitrogen, using toxicity until DIN can be revisited and imposing a synthetic nitrogen fertiliser cap, is simply that the Minister had to be seen to be doing something. The Policy Statement carries some good wins for the environment when it comes to reducing sediment getting into our waterways but little else.

In an election year the Minister needs to be able to point to his constituents and say “I did something”, and when it’s a choice between politics and finding effective solutions, politics will always be the winner.

Out In The Cold On Freshwater -- April 2020

As New Zealand entered the nationwide lockdown in response to COVID-19, I was acutely aware of the privileged position I was in as a dairy farmer; I could still go to work each day, Fonterra would ensure my milk was picked up on schedule and the milk cheque would still be deposited into my bank account on the 20th of each month.

The effects of the virus on my business have largely been minimal; there has been a two month delay in sending some cull cows to the meat works, the value of these cows has crashed and I can no longer go into a Farm Source store for a coffee and chat when I pick up my supplies.

Despite these minor inconveniences, we’re not at risk of losing our businesses and we can keep our employees working and paid, and I was happy to see this largely reflected in farmer’s online behaviour. It’s time for farmers to keep our heads down and keep working while doing our best to support and help others who have been caught up in the effects of fighting the virus. Our tourism industry ceased to exist overnight and the flow on effects to related industries like hospitality are reflected in our growing unemployment figures.

I was surprised then, against this backdrop of business as usual for the primary sector and economic devastation for the service industry, to see Federated Farmers publicly calling for farmers to be given a break. They wanted the Government to defer policies on freshwater management, climate change, Resource Management Act reform and more.

Holding ourselves up as potential economic saviours of the country might be tone deaf and a touch arrogant, but publicly calling for special treatment at the same time plumbs new depths.

Part of my surprise was that the call was done via a press release instead of a quiet word in the ear of a Government official behind closed doors. Surely that’s the power of having an industry group helping to shape the very legislation they’re now calling to delay?

Of all the policies freshwater was the one that surprised me the most. It’s a personal crusade for the Minister for the Environment and, once the consultation process has finished and all the submissions have been summarised, the Ministry will pass their advice to Cabinet who will then issue a National Policy Statement on Freshwater.

That’s it. There’s no Select Committee hearing and no need for a law change, the NPS will provide direction to regional and district councils as to how they should carry out their responsibilities under the RMA. There are no second chances.

Surely Federated Farmers have been working tirelessly in the background making the views of their members known, making their policy team available to the Ministry for the Environment and the four advisory groups that had been established?

Unfortunately not. Documents released to Politik website under the Official Information Act show that Federated Farmers, suspected of leaking confidential information, have effectively been excluded from discussions on freshwater reform since May of last year.

How bad is this for farmers? When Fed’s invited Martin Workman, the Ministry’s Director for Water, to their board meeting to discuss the water proposals he declined to attend saying “The recent sharing of confidential information provided to primary sector groups means we are not able to share further information on Essential Freshwater.”

In June a Federated Farmers official apologised to the Minister’s Advisor over the leak without accepting any responsibility, the equivalent of a “sorry, but not sorry” letter. The damage had already been done. A policy that will deeply affect farmers has been developed almost entirely without a rural perspective being heard.

The reputational damage to Federated Farmers is immeasurable. They are viewed with suspicion by the Ministry and it’s fairly safe to assume calls to delay any policies will simply be ignored.

The idea that a policy as important as the National Policy Statement on Freshwater could be developed without significant input from the very group who are meant to represent farmers interests is almost ludicrous, yet that’s exactly the situation we find ourselves in.

I’ve been told before when I’ve criticised various bodies for their dealings with the Government that it’s far better to have a seat at the table so you can at least negotiate some compromise. As far as freshwater is concerned, farmers weren’t even in the room, and the very group we pay to represent our views have only got themselves to blame for that.

A DIRA Decision -- March 2020

As the world is faced with torrents of horrific news as the pandemic sweeps the globe, it feels like there is little to be positive about. But over recent weeks there have been two small gems for New Zealand dairy farmers.

The first piece of good news was Fonterra’s half year financial results, which are a remarkable turnaround from the Co-op’s first ever loss posted last year. The loss wasn’t insignificant or so small it could be dismissed as a rounding error, the Co-op lost over half a billion dollars which only makes the recent turnaround even more impressive.

At a time of mass uncertainty when many people don’t know if they’ll still have a job in a few months, it is somewhat relieving that these results will see Fonterra inject more than $11 billion into the New Zealand economy through milk payments to their farmers. Those farmers will in turn spend over half of that in their local communities, communities which need money now more than ever before. It’s not just Fonterra farmers who will benefit from the Co-op’s strong performance; independent processors around the country will be benchmarking themselves off the Co-op’s strong performance.

The second piece of positive news, which I’m sure many will have missed, was the Primary Production Select Committee’s report on the Dairy Industry Restructuring Act (DIRA) Amendment Bill. This legislation created Fonterra nineteen years ago and it subjects the Co-op to frequent reviews. I expected that the cross-party committee would tinker with the legislation, creating a hodge podge of barely workable compromises like previous committees have done. What I wasn’t expecting was unanimous clarity and sweeping reform from the cross-party panel of MPs.

The Committee have decided open entry should go except for genuine new farmers who have never supplied milk before. Fonterra’s competitors fought hard to retain open entry, the rule that forced Fonterra to accept milk from anyone who wanted to supply them, because it made it far easier for them to poach supply from the Co-operative. The open entry provision also drove a massive spike in dairy conversions as it forced Fonterra to collect all the new milk.

Now there’s no safety net, people are still free to cash in their Fonterra  shares and sign a contract with an independent processor, but they’ll be thinking a lot more carefully about the long term implications of that decision because there’s no guarantee Fonterra will take them back if they change their mind.

New processors who set up shop in New Zealand will no longer receive three year’s supply of raw milk at cost from Fonterra. This rule was designed to ensure competitive domestic supply but was cynically flouted, primarily by foreign owned processors, to get low cost raw material which they’d process and export for their products to compete against Fonterra’s on foreign supermarket shelves. Now they will only get this supply for one year, still not perfect but a vast improvement and something that levels the playing field significantly.

Goodman Fielder, a company that has had 20 years to secure their own supply chain yet failed to do so, complained long and hard that the 10 cents per kilogram of milk solids they paid to piggyback off Fonterra’s infrastructure was too onerous. The Select Committee disagreed and Fonterra have won the right to charge more for its services.

The Select Committee heard time and again that Fonterra, who are charged with paying their suppliers the highest possible sustainable milk price, were paying farmers too much. It was a common refrain from processors and their lobbyists seeking to drive down the price they paid their own suppliers in order to increase dividends for their overseas shareholders. The High Court found this was not the case when Open Country Dairy tried to litigate the matter, and the mechanism for determining milk prices remains largely unchanged in the new version of DIRA.

I don’t know if there was any one thing that convinced the Select Committee of the merits of Fonterra’s submission; strong support from farmers, excellent submissions by the Dairy Worker’s Union and Fonterra’s Shareholders’ Council or if it was just a committee unusually blessed with common sense.

Fonterra have weathered a lot of criticism recently for “cosying up to the Government”, for taking a leadership role in climate change, for working with the Government on fresh water and clean energy rather than fighting it every step of the way. I’ve been to enough meetings in recent times to know that not all directors or councillors were happy with this fresh approach to government relations, but this result with DIRA thoroughly vindicates the people who convinced the management team it was worth a try.

It’s not a done deal yet, the changes still need to be passed into legislation and things will be delayed due to COVID-19, but the fact it has cross-party support and unanimous endorsement from the Select Committee give me hope its passage through Parliament will be uncomplicated. After nearly two decades in existence, Fonterra will finally be free of some unnecessary constraints and can be left to focus on doing what it does best.

Pineapple Upside Down Cake, The Country -- March 2020

Every enthusiastic amateur cook knows the best time to experiment with a new recipe is when you’re having guests over for dinner, so when I heard Uncle Ken and Aunt Raewyn were coming to stay I promptly decided to bake my first ever cake.

There’s a certain type of confidence that’s particular to middle aged men, and it was with this certainty that nothing could possibly go wrong that I decided if I was going to bake a cake I might as well go the whole way and do it in my home built smoker.

I won’t pretend I attempted anything fancy, it was after all my first ever  crack at this cake business, so after a short search I settled on something so simple they use it in primary school cooking classes; pineapple upside down cake. Yes, I was going to bake my first ever cake in a converted 44-gallon drum and I was going to do it upside down.

My planning was meticulous; the roast beef would go in the smoker for two hours and come out at a piping 65 degrees (Uncle Ken is a medium-well done kind of guy), then while the beef was resting the cake would take its place in the smoker for an hour, coming out for dessert just as we were finishing dinner.

To ensure things went smoothly I started my preparation early. I poured 50g of melted butter into my newly purchased cast iron frying pan, I couldn’t believe my luck when I saw Briscoe’s had them on sale, and sprinkled ¾ of a cup of brown sugar on top of that. This was going to be the sweet sauce on top of the cake. Then I added a layer of pineapple rings, omitting the maraschino cherries the recipe called for because I’m not a monster, and got to mixing my batter.

The batter is so simple it’s almost embarrassing; 1.5 cups of self-rising flour, 1 cup of white sugar and a teaspoon of salt all mixed together. Then add 50g of melted butter, a cup of buttermilk and 2 eggs and stir it all like mad and pour it over the pineapple rings in your frying pan.

I proudly tweeted my achievements at about 3pm and was almost immediately asked if I was having the cake for afternoon tea, because apparently you can’t leave mixed batter just sitting on the bench for a few hours while you tell people how clever you are.

This led to a the smoker being hastily lit and the cake going in at 4pm while Ken and I watched in vain as the smoker obstinately refused to hit the desired temperature of 175 degrees, this cake was going to be cooked at 150 degrees or not at all.

An hour later, toothpick at hand, Ken and I eagerly lifted the lid to check on our golden brown creation. The toothpick was unnecessary as the sight that greeted us was almost indistinguishable from the raw batter that had gone in earlier.

After a quick conference we decided that cake or no cake we did actually want roast beef for dinner, so off came the lid again and onto the coals went a chunk of apple wood. The roast was plonked on the bottom rack, the cake back on the top rack and on went the lid.

This had all the hallmarks of a disaster, which was not a scenario that had occurred to me at any point during the day. Then a miracle happened, I had severely overestimated the cooking time for the beef and a mere 70 minutes later it was ready to eat.

Ken and I extracted the roast with the sort of teamwork and precision normally reserved for brilliantly executed All Black tries and were thrilled to see the cake was no longer a runny mess but actually semi-solid, so we replaced the lid and shut off the airflow to the coals and went inside for dinner.

After dinner I brought the cake inside, golden brown and oh so fancy in its bright red frying pan. I flipped the pan upside down and the cake slid effortlessly onto the waiting platter, drenched with thick sweet sauce, pineapple rings glistening proudly.

I’ve baked my first cake now and it was rich, sweet, hot, smoky and delicious. Maybe I’ll use the oven next time.

Tiwai Point -- February 2020

The various owners of Tiwai Point aluminium smelter have been out-negotiating successive New Zealand Governments since before the smelter was even built. The builders and original owners of Tiwai Point, Consolidated Zinc, reneged on their agreement with the Government to build the Manapouri hydroelectric power station, leaving the Government to foot the $135 million bill in order to make ConZinc commit to the construction of the smelter.

The smelter paid little to no tax from its opening in 1971 through to the late 80s and, due to its exposure to bauxite prices, electricity charges and fluctuations in the New Zealand dollar, frequently operates at a loss.

Despite its wildly changing fortunes the smelter has grown to be a significant employer in Southland, directly employing some 800 staff and 2000 contractors, and by some estimates it’s responsible for 10% of Southland’s GDP. This is one card Rio Tinto, the smelter’s current owners, play when negotiating with the Government. The other card is the Manapouri power station; without Tiwai Point the station is a stranded asset.

Tiwai consumes some 570MW of electricity annually, which is one third of the South Island’s consumption and thirteen percent of the nation’s, and uses it to produce the most pure aluminium on the planet. Without the smelter there’s nowhere else for the power to go. Every time closure is threatened blueprints to upgrade the South Island’s power networks are dusted off, and every time the threat is averted, as with the Government’s $30 million bail out in 2013, the plans are shelved again.

Almost every commentary I have read about a post-smelter New Zealand imagines the power being exported to the North Island, with Huntly power station being closed and the nation rejoicing as power prices tumble. The reality is much further from the truth; there’s no infrastructure to carry the extra power north and the inefficiencies in transporting it that far are huge. The best we can hope for, if the infrastructure upgrades in the South Island are completed, is cheaper prices in the South with Manapouri operating at a greatly reduced capacity. The worst case scenario would see the power station mothballed.

Wouldn’t it be nice if there were an option that allowed the Government to say “No, there will be no more handouts, we have another taker for the electricity and if you don’t like it you can leave”?

The Labour-led Coalition recently announced they were spending $10 million to replace the coal boilers in eight schools and two hospitals, reducing CO2 emissions by some 3000 tonnes (the equivalent of taking 1200 cars off the road). On the same day Fonterra announced they were converting their Te Awamutu factory from coal to wood pellets. This conversion carries a price tag of $11 million and will reduce emissions by 84,000 tonnes (32,000 car equivalents). I did the maths, that’s $8,333 per car equivalent for the Government and $344 for Fonterra. The private sector proves its efficiency again.

Fonterra’s Edendale factory in Southland is the Co-operative’s largest user of coal, it uses twice as much as the Te Awamutu site, but converting Edendale to an alternative fuel source is no simple task; there’s no piped supply of natural gas in the South Island and nowhere near enough readily available biomass to make wood pellets or similar a viable option. If only there was an abundant supply of clean, renewable energy close at hand and some way to get it to the factory…

Imagine if the Government dipped into their $200 million decarbonisation fund to build transmission lines to Fonterra’s Edendale plant, lines capable of bearing a load sufficient to allow Fonterra to convert their largest coal burning site to electricity.

There’s no downside; the Government would be investing in infrastructure, as they should, Fonterra would invest in a capital upgrade that reduces their coal consumption by a whopping 20% and the leverage Rio Tinto holds over our Government would all but disappear.

If Rio Tinto wants to stay then Manapouri could ramp up output and supply both Fonterra and the smelter, they’re capable of sustaining outputs of 800MW. If Rio Tinto decides to go, well there’s a little something they don’t tell you about the world’s most pure source of aluminium; each tonne produced comes with a price tag of 1.9 tonnes of CO2 emissions, and in Tiwai Point’s case that’s a whopping 570,000 tonnes per annum. Add that to the potential 170,000 tonne saving from weaning Edendale off coal and that’s the equivalent of removing 300,000 cars from New Zealand’s roads

If the Government are serious about climate change being this generation’s nuclear free moment then this would be a big step forward in taking action. Cutting CO2 emissions by a further 170,000 tonnes seems a lot more valuable to New Zealand than giving a gift to a billion dollar overseas-owned company.